Hi David!
In "options>file associations": uncheck all the "image" file check boxes.
If you still have Irfanview (
http://www.irfanview.com) installed, open it and under "Options>set file associations" select "images only". This way, when you click on an image it will open with Irfanview, not MC and won't be loaded into MC's Playing Now, (which seems to have happened and the CD you burned in 30 secs is probably the images that were sent to Playing Now).
You can still make playlists of images by importing the images from My Pictures directly into a playlist. You will also still be able to manually import and view images with MC, they just won't be automatically associated with MC when you double click on an image (they'll go, in this case to Irfanview).
For those unfamiliar with Irfanview, It is a Free basic image editing & viewing application. I use it all the time before I add album cover art to MC. You can crop/resize/adjust color balance & brightness etc. Once installed, you just click on an image,(assuming file associations are set as mentioned previously), the image opens in Irfanview and all the controlls are available.
My procedure for downloaded albums: once the album is loaded into the hard drive directory (D: Artist/Albums), I find the cover art (Walmart.com or Amazon.com usually) and save it to the Album folder. Then I click on the image and edit as apropriate and resize (to 800x800). Finally I import the album into MC (and the cover art, renamed to the album title, is imported as well).
One note: I resize the images as I like a full size image in "full screen" mode. MC and some other apps don't enlarge to fill the screen. I use Walmart(500x500pix) and Amazon(300x300pix) as their image size is larger to start with than AMG (200x200pix)which is what the automatic image finders have been using as a source. A 200x200 pixel image does not resize real well to 800x800.